Profound Medical Announces Second Quarter 2020 Financial Results

Thursday, 06. August 2020 22:02

TORONTO, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the “Company”), the only company to provide customizable, incision-free therapies which combine real-time Magnetic Resonance Imaging (“MRI”), thermal ultrasound and closed-loop temperature feedback control for the radiation-free ablation of diseased tissue, today reported financial results for the second quarter ended June 30, 2020, and provided an update on its operations.

Recent Corporate Highlights

  • On April 3, 2020, Profound launched a TULSA procedure website, www.tulsaprocedure.com, as a resource for patients with prostate disease.

  • On July 21, 2020, Profound closed an underwritten offering of common shares (the “July 2020 Offering”), including the full exercise of the over-allotment option, for gross proceeds of approximately US$46 million.

“We are very encouraged by the continuing strong interest shown in TULSA-PRO® by both surgeons and patients across the United States,” said Arun Menawat, Profound’s CEO. “That culminated in us completing the first installation of TULSA-PRO® at a teaching hospital – the world-renowned Mayo Clinic in Jacksonville, FL – in early July. Moving forward, as we continue to execute on our U.S. TULSA-PRO® commercialization strategy, building additional awareness of this technology will be key to our success. To that end, we are looking forward to launching a new patient forum in the Fall, through which patients will be able to share their experiences with the TULSA procedure, as well as rolling out both surgeon-to-surgeon and patient-to-patient education programs.”

Summary Second Quarter 2020 Results

All amounts, unless specified otherwise, are expressed in Canadian dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.

For the second quarter ended June 30, 2020, the Company recorded revenue of $1,421,223, with $1,131,801 from the sale of product, $97,868 from pay for procedure and $191,554 from installation and training services. Second quarter 2020 revenue increased approximately 148% from $574,109 in the same three-month period a year ago.

The Company recorded a net loss for the three months ended June 30, 2020 of $7,347,529, or $0.46 per common share, compared to a net loss of $5,844,134, or $0.54 per common share, for the three months ended June 30, 2019. The increase in net loss was primarily attributed to increases in general and administrative (“G&A”) expenses, selling and distribution expenses, and net financing costs by $688,764, $220,619, $1,469,688, respectively. This was offset by a decrease in research and development (“R&D”) expense of $802,488 and an increase in gross profits of $245,788.

Expenditures for R&D for the three months ended June 30, 2020 were $2,383,867, compared to $3,186,355 for the three months ended June 30, 2019. Clinical trial costs, materials, travel, salaries and benefits, and software expenses decreased by $330,260, $517,520, $77,408, $167,227, and $26,646, respectively. These decreases were due to decreased spending on materials and R&D projects due to the impact of COVID-19, as hospitals and testing facilities were not accessible, lower travel due to COVID-19 restrictions, decreased R&D personnel, the Canada Emergency Wage Subsidy (CEWS) and lower software and hardware costs. Offsetting these amounts were increases in consulting fees and share based compensation of $181,807, and $153,453, respectively, due to increased spending for reimbursement, market research and options awarded to employees.

G&A expenses for the three months ended June 30, 2020 increased by $688,764 compared to the three months ended June 30, 2019. Consulting fees, share based compensation, insurance and software expenses increased by $59,737, $242,009, $397,181, and $177,670, respectively, due to increased costs associated with being Nasdaq listed, options awarded to employees, increased insurance costs associated with being Nasdaq listed and increased software costs for cybersecurity. Offsetting these amounts were decreases to salaries and benefits of $97,607 and travel of $59,146 which were due to lower personnel costs, CEWS and COVID-19 travel restrictions. Depreciation expenses decreased by $23,173 due to certain assets being fully depreciated.

Liquidity and Outstanding Share Capital

As at June 30, 2020, the Company had cash of $55,964,086. Subsequent to quarter end, the Company completed the July 2020 Offering, resulting it in having approximate cash of $112 million at July 31, 2020.

As at August 6, 2020, Profound had 19,378,152 common shares issued and outstanding.

For complete financial results, please see our filings at www.sedar.com and our website at www.profoundmedical.com.

Conference Call Details

Profound Medical is pleased to invite all interested parties to participate in a conference call today, August 6, 2020, at 4:30 pm ET during which time the results will be discussed.

Live Call: 1-844-407-9500 (Canada and the United States)
  1-862-298-0850 (International)
   
Replay: 1-919-882-2331
Replay ID: 35945

The call will also be broadcast live and archived on the Company's website at www.profoundmedical.com under "Webcasts" in the Investors section.

About Profound Medical Corp.

Profound is a commercial-stage medical device company that develops and markets customizable, incision-free therapies for the ablation of diseased tissue.

Profound is commercializing TULSA-PRO®, a technology that combines real-time MRI, robotically-driven transurethral ultrasound and closed-loop temperature feedback control. TULSA-PRO® is designed to provide customizable and predictable radiation-free ablation of a surgeon-defined prostate volume while actively protecting the urethra and rectum to help preserve the patient’s natural functional abilities. TULSA-PRO® has the potential to be a flexible technology in customizable prostate ablation, including intermediate stage cancer, localized radio-recurrent cancer, retention and hematuria palliation in locally advanced prostate cancer, and the transition zone in large volume benign prostatic hyperplasia (BPH). TULSA-PRO® is CE marked, Health Canada approved, and 510(k) cleared by the U.S. Food and Drug Administration.

Profound is also commercializing Sonalleve®, an innovative therapeutic platform that is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. Sonalleve® has also been approved by the China National Medical Products Administration for the non-invasive treatment of uterine fibroids. The Company is in the early stages of exploring additional potential treatment markets for Sonalleve® where the technology has been shown to have clinical application, such as non-invasive ablation of abdominal cancers and hyperthermia for cancer therapy.

Forward-Looking Statements

This release includes forward-looking statements regarding Profound and its business which may include, but is not limited to, the expectations regarding the efficacy of Profound’s technology in the treatment of prostate cancer, uterine fibroids and palliative pain treatment. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.  Such statements are based on the current expectations of the management of Profound. The forward-looking events and circumstances discussed in this release, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the pharmaceutical industry, economic factors, the equity markets generally and risks associated with growth and competition. Although Profound has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it will have on Profound’s operations, the demand for its products, global supply chains and economic activity in general. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Profound undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.

For further information, please contact:

Stephen Kilmer
Investor Relations
skilmer@profoundmedical.com
T: 647.872.4849

     
Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
(Unaudited)
 
  June 30,
2020
$
  December 31,
2019

$
 
     
Assets    
     
Current assets    
Cash 55,964,086  19,222,195 
Trade and other receivables 4,594,426  4,058,136 
Investment tax credits receivable 240,000  240,000 
Inventory 6,781,987  4,764,458 
Prepaid expenses and deposits 583,891  1,335,620 
Total current assets 68,164,390  29,620,409 
     
Property and equipment 663,366  684,718 
Intangible assets 2,551,997  3,128,820 
Right-of-use assets 2,012,198  2,199,381 
Goodwill 3,409,165  3,409,165 
     
Total assets 76,801,116  39,042,493 
     
Liabilities    
     
Current liabilities    
Accounts payable and accrued liabilities 2,742,942  3,933,114 
Deferred revenue 1,028,766  654,763 
Long-term debt -  5,144,461 
Warranty provision 129,871  134,956 
Other liabilities 106,513  286,858 
Derivative financial instrument 487,235  254,769 
Lease liabilities 346,587  258,685 
Income taxes payable 5,856  15,763 
Total current liabilities 4,847,770  10,683,369 
     
Long-term debt -  6,719,924 
Deferred revenue 490,835  829,784 
Warranty provision 28,509  19,005 
Lease liabilities 1,937,279  2,125,873 
     
Total liabilities 7,304,393  20,377,955 
     
Shareholders’ Equity    
     
Share capital 194,991,770  130,266,880 
Contributed surplus 16,483,466  19,580,338 
Accumulated other comprehensive gain/(loss) 42,201  (117,188)
Deficit (142,020,714) (131,065,492)
     
Total Shareholders’ Equity 69,496,723  18,664,538 
     
Total Liabilities and Shareholders’ Equity 76,801,116  39,042,493 


 
Profound Medical Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
 
  Three
months
ended
June 30,
2020
$
  Three
months
ended
June 30,
2019
$
  Six
months

ended
June 30,
2020
$
  Six
months

ended
June 30,
2019
$
 
         
Revenue        
Products 1,131,801  465,840  2,489,340  1,813,621 
Services 191,554  108,269  353,148  236,276 
Pay per procedure 97,868  -  138,953  - 
  1,421,223  574,109  2,981,441  2,049,897 
Cost of sales 845,392  244,066  1,811,000  777,422 
Gross profit  575,831  330,043  1,170,441  1,272,475 
         
Operating Expenses         
Research and development 2,383,867  3,186,355  5,223,084  5,864,101 
General and administrative 2,275,087  1,586,323  5,328,314  3,100,436 
Selling and distribution 1,375,488  1,154,869  2,629,817  625,524 
Total operating expenses 6,034,442  5,927,547  13,181,215  9,590,061 
         
Operating Loss 5,458,611  5,597,504  12,010,774  8,317,586 
         
Net finance (income)/costs  1,696,118  226,430  (1,372,087) 399,234 
         
Loss before income taxes 7,154,729  5,823,934  10,638,687  8,716,820 
         
Income taxes 192,800  20,200  316,535  54,000 
         
Net loss for the period 7,347,529  5,844,134  10,955,222  8,770,820 
         
Other comprehensive loss (income)        
Item that may be reclassified to profit or loss        
Foreign currency translation adjustment - net of tax of $nil (2019 - $nil) (25,728) (11,843) 159,389  (58,232)
Net loss and comprehensive loss for the period 7,321,801  5,832,291  11,114,611  8,712,588 
         
Loss per share         
Basic and diluted net loss per share 0.46  0.54  0.71  0.81 


 
Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 Six
months
ended

June 30,
2020
$
 Six
months
ended

June 30,
2019
$
 
   
Operating activities  
Net loss for the period(10,955,222)(8,770,820)
Adjustments to reconcile net loss to net cash flows from operating activities:  
Depreciation of property and equipment245,277 257,299 
Amortization of intangible assets203,663 564,219 
Depreciation of right-of-use assets576,823 204,126 
Share-based compensation1,490,806 456,427 
Interest and accretion expense696,866 681,258 
Deferred revenue35,054 387,165 
Change in fair value of derivative financial instrument232,466 54,220 
Change in fair value of contingent consideration11,580 (208,911)
Foreign exchange on cash(1,701,391)- 
Changes in non-cash working capital balances  
Trade and other receivables(536,290)(248,171)
Prepaid expenses and deposits751,729 63,186 
Inventory(2,206,342)20,277 
Accounts payable and accrued liabilities(1,071,273)(1,612,144)
Provisions4,419 (1,219,114)
Income taxes payable(9,907)(133,274)
Net cash flow used in operating activities(12,231,742)(9,504,257)
   
Financing activities  
Issuance of common shares52,098,723 - 
Transaction costs paid(4,152,072)- 
Payment of other liabilities(191,925)(16,203)
Payment of long-term debt and interest(12,497,993)(534,709)
Proceeds from share options exercised1,540,180 5,399 
Proceeds from warrants exercised10,650,381 - 
Payment of lease liabilities(175,052)(143,943)
Total cash from financing activities47,272,242 (689,456)
   
Net change in cash during the period35,040,500 (10,193,713)
Foreign exchange on cash1,701,391 - 
Cash – Beginning of period19,222,195 30,687,183 
Cash End of period55,964,086 20,493,470 

 

Primary Logo

Related Links: 
Author:
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.